The pandemic has produced a huge range of complications, not least when it comes to house building and buying. It’s no secret the housing market in the UK has gone through some difficult times as a result and there have been some fairly hair raising moments for buyers, sellers and developers. However, signs of recovery and positive growth have returned with house prices reaching a record high in March 2021, signalling good news for those who are looking to sell.
What do the housing construction figures say?
In March 2021 house prices in the UK were up just over 1% compared to February. This may seem like a fairly modest rise but it is the first rise since November 2020 and comes in the wake of a very subdued start to the year. As a result, the average property in the UK is now worth £254,606, which sets a new record for average house prices. We are also seeing positive growth forecasts as a result of the latest quarter numbers in which house prices were 0.3% higher than the quarter before. And, despite a very difficult year for the property and construction sectors – and the economy as a whole – the annual figures show a 6.5% rise across the year.
What’s causing the rise in house prices?
There is no doubt that the measures outlined in the Budget 2021 have had an impact on house prices in subsequent weeks. The government announced a new mortgage guarantee scheme that will provide support to buyers who have a 5% deposit and this has created a lot of new activity. The suspension of stamp duty for properties worth up to £500,000 was due to end in March this year but this has been extended to June 30th, meaning many more can now take advantage of this tax break. House prices have also received a boost as a result of the general spike in consumer confidence that we’ve seen due to the success of the vaccine rollout. People are starting to believe that there could potentially be a return to some degree of normality thanks to the success of the programme and this has spiked activity in the market. There is also more buyer interest in properties that cater to the shifts in lifestyle of the past year, including those that are more rural, have access to more outside space and more room for a home office.
Despite the positive numbers for March there are still a lot of uncertainties where the future of the UK housing market is concerned. The rise in house prices is good for sellers and developers but may price even more buyers out of the market, especially as most wages are not keeping up with the increase.
March’s rise in house prices is good news and it is hoped that this is a trend that will continue throughout the year, albeit at a more subdued level as 2021 goes on.
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